How do I enhance the returns on my investment property?
Property investors around the country have enjoyed an excellent run of returns over the past two years. Indeed RP Data reports that over the growth cycle to date, which commenced in June 2012, capital city dwelling values are up 13.9%.
On balance, there are a number of factors that are mostly outside the control of individual investors that will help shape market returns. These include record low interest rates, consumer confidence levels and political cycles. That said, there are a number of factors you can control to ensure your property generates some decent capital growth.
Getting the best possible returns usually begins with paying a fair price for a well-located investment property in a strongly performing city, town or region. This involves doing plenty of research and taking advantage of research hubs such as RP Data and APM. Specialist information websites such as Property Observer and magazines such as Australian Property Investor, Smart Property Investment and Your Investment Property are excellent sources of information such as suburb and town profiles and so on.
As part of the search, look for properties with aesthetic appeal – if you have a flair for renovating, you might be able to create some appeal yourself – remember it should attract tenants. However if the long-term plan is to sell and recoup some gains, then it must appeal to future buyers too. Also from the outset, ensure the property in in good order structurally to keep maintenance and running costs to a minimum – like an owner-occupied home, getting pest and building inspections is a must.
To enhance ongoing rental returns, secure good tenants on long-term leases. This involves finding tenants who are likely to want to stay long term in your area and in your particular property. It’ll be up to your property manager to find out more about the tenants – their referees will prove illuminating.
At the same time, the onus is on owners to be the best landlord possible. Most tenants don’t want to move as it involves time and money. If you attend to repairs and maintenance in a timely manner and don’t try for unrealistic rents, most tenants will stick around reducing the risk of protracted periods of vacancy. Regular maintenance is also an investment in maintaining the quality of your investment property – and ultimately the long-term value of your asset.
For more information on ways to enhance the value of your investment property, speak to your Raine & Horne property manager.
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